NFA Forex Dealer Dead Pool

[forex scholar]

NFA is on the war path right now. This is the fifth poorly capitalized firm they have disciplined this week. If you are a customer of Hamilton Williams or Velocity4x or whatever the hell they call themselves get your money out now. And for the Love of God stay away from poorly capitalized firms! They are dropping like ten pins.
BASIC Case Summary

COMPLAINT:
On May 18, 2007, NFA issued a Complaint charging Hamilton with use of deficient promotional material by non-Member solicitors. The Complaint also charged Hamilton with failing to maintain adequate books and records necessary and appropriate to conduct its business. Finally, the Complaint charged Hamilton with failing to take applicable concentration charges; failing to maintain adequate adjusted net capital; and failing to collect the required minimum security deposit.

ANSWER:
On July 5, 2007, Hamilton filed an Answer to the Complaint in which it denied the material allegations contained therein.

DECISION:
On December 5, 2007, Hamilton was ordered to pay a $90,000 fine. Hamilton was also ordered to cease to accept accounts or receive compensation, directly or indirectly, for forex transactions that are introduced by any person unless that person: (1) is an NFA Member, Associate of NFA, or pending approval as an NFA Member or Associate and is not subject to a Notice of Intent to Deny or Revoke registration; (2) is a member or associated with a member, of a national securities association registered under Section 15A(b) of the Securities Exchange Act of 1934 and is operating pursuant to such membership or association; or (3) would be exempt from CFTC registration if such person were acting in the same capacity in connection with exchange-traded futures products.

[forex scholar]

The NFA is as busy as the Post Office on Tax Day. I haven't even had a chance to chew over the closing of FXLQ or One World Capital yet due to the continuing complaints and emergency actions the NFA is cranking out this week. Nor have I gotten a chance to talk about the Solid Gold or Velocity4x complaints. That's because the Savior must prioritize. And the latest priority is a forex firm that went by the name of Tradeco which just got banned for life by the NFA. BASIC Case Summary

Frankly I had never even heard of this company before the NFA banned them yesterday. But I have heard of their former principal, Mr. Ryan Nettles. It seems like Nettles has been involved in every forex boondoggle of the last decade. There is the Tradex debacle and the Finex Fiasco. And there was a dodgy outfit per Forex Bastards by the name of Futures and Options of Texas that went out of business in 2001: TradeX Swiss AG Reviews | TradeX Swiss Ag Ratings | Tradexfx.com reviews and ratings

In short, Mr. Nettles gets around. Between 1997 and 2004 Nettles was registered with six different futures firms with the NFA: BASIC Details
Today most of those firms are out of business. But it wasn't until 2004 that Nettles really seemed to hit his stride.

For it was in 2004 that Nettles applied to be a principal with the Tradex Group. Ah yes, Tradex. The very name of this firm makes the bile rise in one's throat. The Tradex Group was banned in 2006 by the NFA and earlier this year the mutated offspring of the Tradex Group, Tradex Swiss AG, was shut down in Switzerland and then thrown into bankruptcy leaving legions of traders stranded in purgatory.
BASIC Case Summary

The implosion of the Tradex Group in 2006 was the source of a humorous article in Euromoney in which Craig Karlis of Tradex Swiss AG infamy and Ryan Nettles were at each other's throats like a couple of pitbulls from Michael Vick's Badnewz kennels. While the article is firewalled here are some choice quotes that indicate Nettles won't be able to get a good reference from his old employer anytime soon.
(FX trading: Let the mud slinging begin / / Euromoney magazine)

Karlis is quoted as saying, "Mr Nettles, while employed by Tradex Group, took it upon himself to start a CTA. he did this without Tradex knowledge. When that happened he put Tradex Group in control of the NFA... He had all his commissions sent to an account in the Bahamas. He Also had a dealing desk that offset all positions... After an audit all this information was revealed."
Nettles countered that, "I was just an employee. They told me to do this." Of course, he was just following orders. Where have I heard that before? In the end Nettles stated that, "He's pissed off at me for some reason. I also took my customers away from Tradex. That's why he's all pissed off at me." Ya think?

Question is where did he go to after his falling out with Karlis? Well Nettles isn't one to head over to the unemployment office and go on the dole. No Nettles quickly jumped ship and joined the doomed ocean liner: Tradeco Clearing Group LLC. Tradeco was actually the 100th firm to use Metatrader per a press release from the company. But after two months though Nettles hit the road and left Tradeco, he was after all born a rambling man.
But that didn't stop the NFA from issuing a complaint against nettles a year later. Indeed, it is a very strange case. Tradeco officially withdrew their membership from the NFA in August of 2007, one month before the NFA filed a complaint against them for fraud and failing to meet their capital requirement.

Furthermore, I can find no record of Tradeco on the CFTC capital reports at all for 2007. In fact, their last CFTC report was filed in August of 2006 when they reported that they were $750,000 below the minimum capital requirement. That's right, only a few months after they got their license they were not only violating their capital requirement, but failing to file any financial reports and still allowed to stay in business. That's an impressive accomplishment.

So what finally set the NFA off? It looks like they discovered all this during a 2007 audit of the firm. They must have done it right before Tradeco closed their doors. The examination is good for a laugh however. Highlights to come in Part II.

[forex scholar]

We pick up the story in the summer of 2007. Tradeco is still technically in business although Nettles has long since cut his official ties to the firm. Here are the highlights of the NFA's complaint:

The website claimed that Tradeco's trading platform permitted customers to trade "from real time streaming quotes" with "greater ease in executing trades" on a platform that "has a proven track record of reliability and stability."

Tradeco, however, had not had a trading platform on which customers could trade since at least July 2006.

Two words: BUCKET SHOP

Tradeco's website further claimed that its platform provided "trading technology [that] is the result of over 5 years of development and today supports billion in monthly trade volume." The website also declared that "clients and partners from over 110 countries currently rely on our proven technology, execution, clearing services and administrative tools."
In addition to not having a trading platform, Tradeco only had approximately twenty customers from five different countries, none of which had actually traded through Tradeco.

Bwahahahaha! Let that be a lesson to everyone. Just because someone throws up a website and makes grandiose statements doesn't mean they're legit.

Through its website, Tradeco also claimed to be insured with "a fidelity 14 bond, which protects against loss resulting from fraudulent acts committed by an employee acting alone or in collusion with others."
When NFA inquired about the fidelity 14 bond, Tradeco was unable to provide any evidence that it had such a bond.

Ah yes, the old "Fidelity 14 bond." I have seen firms toss this old lemon around in the forex industry to try and ease the concerns of customers worried about the safety of their funds. Whenever you see this old dog dragged out of the kennel that should sound the alarm bell in your head to put your money elsewhere as few serious brokers try to pawn that off on their customers.

Later in the complaint the NFA calls out Tradeco for not only failing to meet their capital requirements but for failing to even keep a general ledger. Guess that's why we never saw any reports on the CFTC website this year...
So who is to blame for this mess? The NFA tried to pin the blame on Nettles since he was "The director of operations for Tradeco and the firm's AML compliance officer. Accordingly, Nettles had supervisory responsibilities with regard to Tradeco's activities."

But Nettles strongly disagreed and in his response to the NFA's charges basically denied everything and said he had nothing to do with it. The NFA has not rendered a decision on his culpability, but they did find Tradeco guilty on all counts. Only problem is Tradeco no longer exists. No one ever replied to the NFA complaint which is probably still sitting in some over stuffed mailbox with all of Tradeco's other bills, flyers and court summonses. Talk about beating a dead horse...

So where is the running man today? Well last anyone heard he was involved in the "Finex Group." Traders at Forex Factory put the word out on Finex earlier in the year (Swiss Law and Dukascopy.com/Finex.com - Page 2) and sure enough a few months later Swiss authorities swooped in to freeze all of Finex's accounts (Finex - Beware). In a rather droll email Finex agents told their customers:

Finex Group GmbH is currently under audit of the Swiss Federal Banking Commission. The reason for this audit is to determine if Finex Group GmbH is required to have a bank license to offer forex trading in Switzerland . So at this time, please do NOT send any funds until we get the results of the SFBC. Regarding withdraws requests, we are told by the lawyers appointed by the SFBC that we can’t process them until conclusion of this audit and we don’t have a timeframe when this will happen as of today. We are in process of setting up another Finex Group company in another country that will take over the Finex’ FX business in Switzerland incase their final decision is that Finex Group is required to have a bank license to operate forex in Switzerland which at this time seems to be what that conclusion will be. There is no reason to be alarmed and we will either continue in Switzerland or move to another country.

No reason to be alarmed?! With Ryan Nettles on the scene traders should have EVERY REASON TO BE ALARMED. Of course they can always, "move to another country." And so the running man just keeps on running. Run Ryan! Ruuuuuuuuuuuuuuuuuuuuun!

[forex scholar]

Today the CFTC issued their final report on Net Capital before the new $5 million capital requirement rule goes into effect.
Financial Data for FCMs

While this report details balances as of only October 31, it is the last piece of independent data the public can use before the bell tolls in a few weeks. And don't think these firms don't know that. Furthermore, in light of the FXLQ scandal, the numbers you see here are more likely to be overestimates of how much capital these firms have so be sure to factor that into the equation.

At this point in time any firm that still isn't reporting capital of over $5 million should be avoided by the trading public at all costs. The risk is too large and as One World Capital has shown it just isn't worth it. The following 10 firms should be avoided at this point in time as they are at high risk for going out of business. If you have money with them, take it out, NOW.

1) SNC Investments: $1,152,000
They are well below the $5 million capital requirement. It is highly unlikely they will make the new requirement at this point. I advise customers to leave this firm and look for greener pastures.

2) Wall Street Derivatives: $1,228,000
This firm is based out of New Zealand and I'm not even sure they have any U.S. customers as their U.S. website is out of service.

3) Advanced Markets: $1,322,000
Amifx is already teetering on the brink as they are the subject of a business conduct committee case before the NFA in which they are cited for a whole host of financial violations including not meeting the old capital requirement. This firm does not have much of a future.

4) Hamilton Williams (VelocityFX): $1,345,000
This firm is a train wreck. They just got fined $90,000 by the NFA for not meeting the old capital requirement. Then they lost their liquidity provider when FXLQ got shut down. Now they can't accept any customers from their unregistered introducing brokers. This firm is literally on life support. Do yourself a favor and stay the hell aware from them before the regulators pull the plug on them once and for all.

5) Solid Gold Financial: $2,040,000
Solid Gold's future is now in serious doubt. Like many of the other firms on this list they have been charged by the NFA with failing to meet their existing capital requirement. When you can't meet the old requirement it stands to reason you won't be able to meet the new one either. Solid Gold is anything but a solid investment at this point.

6) Bacera Corporation: $2,300,000
Like a turd that won't flush Bacera Corporation just refuses to go down the drain. The Savior wrote Bacera off over the summer as sources knowledgeable about them stated they were going to close up shop. But no, they are still hustling the folks in LA for fresh deposits. In September Bacera settled a complaint with the NFA after it was discovered they were undercapitalized to the tune of $1.2 million. NFA reported Bacera only has about 200 customers as it is. But to those 200, do yourself a favor and get yourself another broker because sooner or later the pipes are gonna get cleaned and these guys are going to get flushed once and for all.

7) GFS Futures & Forex: $2,353,000
This firm is in an especially tight fix. They offer 200:1 leverage which means they need to come up with $10 million. And as this number shows they are far, far away from that.

8) Forex Club: $3,320,000
They still have not hit the minimum $5 million mark. And don't forget since they are a market maker they have other financial requirements to meet as well. They still haven't publically done so.

9) Easy Forex: $3,789,000
Under siege for their sleazy sales tactics, it's hard to imagine the NFA isn't going to drop the hammer on them soon.

10) Money Garden: $5,035,000
While they have crept up over the $5 million mark MG is notorious for their 400:1 "flexi" accounts which will require MG put up a minimum $10 million in capital in addition to other financial requirements for being a market maker. They are not even close to doing this despite their CEO's insistence they could easily get the money last summer. It looks like this veteran of the industry is about to be forcibly retired.

And so this is where we stand as of Friday, December 7, 2007. The new $5 million capital requirement kicks in on Friday, December 21, 2007. Two weeks to go. Tick Tock. Tick Tock.

[forex scholar]

For those of you caught in the FXLQ meltdown this thread at Forex Factory has some excellent information:
http://www.forexfactory.com/showthread.php?t=59150&page=3

This trader posted the following which shows you the incredible maelstrom that FXLQ is currently mixed up in:

There are certainly strange things happening with this whole situation. I have a 6 figure account with FXLQ and have been with them for about a year and a half, very happy with them until now, by the way. On Tuesday evening I started my "work day" during the Asian market and tried to put a pending order, to my surprise it would not take it, so after repeated attempts I called the trading desk and they gave me the news on the whole situation. As it was explained by them, it seemed like something that would be resolved in a day or two.

Nevertheless, I filled out a request to withdraw my funds and then went to the NFA link to read the whole case, which clearly portrays a picture of FXLQ making up capital assets with an inexistant Bond from ABN ARMO BANK (one of EU's biggest banks).

Now, I was worried, so I decided to take the next plane to LAX at 8:00AM EST (I live in South Florida). I was in their office by 12:30 PM PST and everyone seemed to be working normally along with two auditors from NFA. After speaking to one person and another and waiting for several hours I was told that they had been denied permission by Jenifer Sunu, from NFA in Chicago to disburse any of my funds. Unfortunately, it was too late to call her in Chicago so I had to wait until the next. . During this time, several of the company executives met with me, including Robert Gray, and they explained how they have funds in different financial institutions in Europe and that the NFA did not want to accept this and ordered them to repatriate all these funds, which they were in the process of doing, but this was not an overnight ordeal. Robert Gray said that this order to repatriate funds had come in on Monday and the Member Responsibility Action, came in the next day (Tuesday).

The following morning I started calling Jenifer Sunu and finally, after about 4 hours of failed attempts, she finally picked up the phone. After listening to everything she had to say, I practically lost all hope of getting my money back, or at least the whole thing. The first thing I asked her was, why she had not authorized FXLQ from giving me my money back and she responded that the audit shows that there is ten million dollars deficiency. In other words, (her words) she said that my position was that of any creditor and had the same importance, legally, as the phone bill, and therefore, if there is a shortfall of 10 million dollars, the creditors would receive their funds in the proportional amount of what is "left". She gave me an example of when a "bankrupt" company dissolves. She even said that this was a done deal on their part. That it was out of their hands and that the CFTC had been notified for them to name a liquidator and dissolve the company and pay creditors with whatever funds are left and they (CFTC) would be in charge of any charges or legal actions against the principals and/or executives..... In short, not much hope.

As soon as I hung up with her, I took off to FXLQ and met with Robert Gray and told him my conversation with Ms. Sunu. He was outraged and immediately called his lawyer into his office and they called Ms. Sunu. While the attorney was trying to reach her, Robert showed me how they had already received two wires from Europe, one for over two million and the other one for a million something.

A few minutes later, the attorney came back to Robert Gray's office and said that Jenifer Sunu, was denying everything (several other customers had also called with similar stories, some where told that they would be lucky to get 50 cents on the dollar). So they asked me, if I wanted to talk to her, which of course I did. We put her on speaker phone and she started by saying that I had misunderstood her, she acknowledged that FXLQ had already received 2 multimillion dollar wires from their offshore accounts and that in no way was this a done deal on the part of the NFA, completely contradicting herself from my earlier conversation.

This, in a way, gave me renewed expectations but at the same time it is really strange that the NFA would bad mouth the company to the extent of practically giving me a verbal "death certificate" and then when confronted with the "patient" takes everything said back. Why?

As far as my perception, to me FXLQ has always showed honesty and integrity, at least compared to a big list of other FXBrokers I have had accounts with. I had many experiences where they honored and fixed, to my benefit errors created by MT4. As far as my face to face meetings with them last Wednesday and Thursday, I get the feeling that they are truly trying to survive this ordeal and the proof is in the millions that they repatriated on Thursday, which shows that instead of folding they ARE actually bringing money in. They think, that ounce they come out of this NFA persecution, they will prove to be stronger than before, which is obviously true, BUT the question is, if they are able to prove that their financial solvency is adequate and in line with what was previously reported, will they be able to continue business as usual or will the damage caused by this whole ordeal be too deep to recover?

I'd like to also mention that I asked Ms. Sunu in my first conversation, what good is their monthly FCM Financial Data Report, if the information in it is not reliable; She answered that all companies are audited every year, but it seems that documents that were accepted last year, are now questionable. So what good is basing your decisions on choosing a broker on this report if its validity is questionable.

In general, I prefer to have the NFA than nothing at all, as most
other countries, but it definitely needs a lot of work to be an real
and effective controlling organization.

UPDATE: I just got a call from one of the executives that told me that they received another four million (I did not ask if they received anything on Friday) and they had been trying to get the NFA to authorize the release of customer funds but had no positive response yet and they expected to get the authorization, hopefully, by tomorrow.
Regards,
CMA

If you have money at FXLQ, MultibankFX or any of the other brokers that clear through FXLQ GET YOUR MONEY OUT NOW IF YOU STILL CAN!

[forex scholar]

Upon second glance at the latest CFTC Capital Report I have come across a rather alarming capital number for a firm that previously have been well above the $5 million minimum capital requirement. The firm is ODL securities and they reported only $2,566,000 in adjusted net capital. The previous month they reported over $9 million in adjusted net capital. That is quite a stunning drop.

But what makes ODL's current number even more disturbing is that in October the NFA gave ODL a beat down in a BCC action in which they charged ODL with a bucket load of financial requirement violations that seriously calls into question the manner in which this firm is run.

NFA Charges:
• F.R.SEC11(a)NEW - FDM MAINTAIN ADJUSTED NET CAPITAL
•F.R.SEC11(b)NEW - FDM TAKE CONCENTRATION CHARGE-UNAFFILIATED
• F.R.SEC11(c)NEW - FDM TAKE CONCENTRATION CHARGE-AFFILIATES
• F.R.Section 11 - LTM REPORTING
• C.R.2-10 - RECORDKEEPING FCMS/IBS
• C.R.2-36(b)(1) - CHEAT, DEFRAUD, DECEIVE FOREX CUSTOMERS

The NFA gives example after example of how this firm misreported its financial numbers and failed to meet the most basic financial regulatory requirements expected of a Forex Dealer.
http://www.nfa.futures.org/BasicNet/Case.aspx?entityid=0330396&case=07BCC00006&contrib =NFA

During the examination NFA discovered that ODL had failed to prepare an accurate net capital computation as of March 31, 2006. ODL had improperly classified cash held at a Cayman Island bank as a current asset when it should have been classified as a non-current asset, failed to properly account for customer debits, netted customer debits against other credits in non-related customer accounts, and failed to the appropriate haircut charge on money market funds held at a brokerage firm. As a result, ODL overstated its net capital by approximately $448,000.

ODL failed to take the applicable concentration charge on transactions with both unaffiliated and affiliated counterparties. This failure resulted in an overstatement of ODL's net capital by approximately $1.3 million on March 31, 2006 net capital computation.

As a result of adjustments to ODL's capital computation resulting from the violations referenced above ODL failed to maintain the required minimum adjusted net capital as of March 31, 2006.

NFA's review of ODL's financial statements during the examination revealed that ODL had also failed to maintain the required minimum adjusted net capital as of April 30, 2006.

Subsequent to NFA's examination, ODL has consistently failed to maintain the required minimum adjusted net capital. Specifically, ODL's adjusted net capital fell under the required minimum on May 31, 2006, August 25, 2006, September 30, 2006, November 10, 2006, November 17, 2006, November 30, 2006, December 1, 2006, December 22, 2006, and January 19, 2007.

The NFA's final decision was as follows:

ODL and King were ordered to be jointly and severally liable for payment of a $165,000 fine. Dubuque was ordered to pay a $3,000 fine. In addition, Dubuque was ordered to tape record, for one year, all conversations between himself and existing or potential customers; retain the tapes for one year from the date they are created; and make the tapes available to NFA upon request.

With ODL's net capital woefully below $5 million and in light of the NFA blowing the lid off ODL's appallingly bad book keeping and shoddy accounting practices I am putting out the warning to the trading public: Avoid ODL and if you have money at ODL it's time to get your money back and find yourself another broker.

[forex scholar]

Royal Forex may no longer be an independent company but that doesn't mean it still doesn't have sins to pay for. Today the NFA fined them $75,000 for the kind of standard, run of the mill incompetence that we've all come to expect from the poorly capitalized. Below is a summary of the NFA's Decision:

NFA orders Florida forex firm and its CEO to pay a fine of $75,000
December 13, Chicago - National Futures Association (NFA) has ordered Royal Forex Trading LLC (Royal), formerly known as Freedom FX LLC, and its chief executive officer, Justin J. Marsch, to pay a fine of $75,000. Royal is a Futures Commission Merchant and Forex Dealer Member located in Boca Raton, Florida. The Decision, issued by NFA's Business Conduct Committee, is based on a Complaint filed in September 2007 and a settlement offer submitted by Royal and Marsch.

The Committee found that Royal and its unregistered solicitors used misleading promotional material and that Royal failed to collect and maintain required security deposits from its forex (foreign currency futures) customers. Additionally, the Committee found that both Royal and Marsch failed to adequately supervise the firm's forex operations.

The guys at IKon really have their hands full...

[forex scholar]

Queue up the music from Swedish Glam Band "Europe" because this week is when the Dead Pool comes to an end. YouTube - Europe-The Final Countdown

This Friday is the NFA deadline for fx firms to meet the minimum $5 million capital requirement. Two updates to report:

GFS Futures & Forex has just made an announcement on their website that they have received a $6 million capital infusion to put them over $10 million thus ensuring a stay of execution from the NFA hangman.

Meanwhile, Velocity4x has thrown in the towel and is handing over their clients to Gain Capital.

December 14, 2007
Dear Valued Customer:
In an effort to better serve the needs of our customers, Velocity4x is pleased to announce a new partnership with FOREX.com, a division of GAIN Capital Group. Effective Friday, December 14, 2007 at 5:00 pm ET Velocity4x will transfer all customer accounts to FOREX.com. Following the transfer of your account, FOREX.com will provide all custody, clearing and support functions.
FOREX.com has worked closely with Velocity4x to ensure the transfer of your trading account is as seamless as possible. You may continue to access the trading platform as you have in the past and utilize your existing login and password.

Trading activity in your account after December 14, 2007 will confirm your consent to be bound by the FOREX.com Customer Agreement. A link to the FOREX.com Customer Agreement is provided here for your convenience: Click here to view the FOREX.com Customer Agreement.

If you choose to close your account following the transfer, you may communicate your decision to FOREX.com directly, through email at velocity4x@forex.com or telephone at 908.458.8274 and FOREX.com will honor your request and return your account balance to you.

If you have any questions regarding this transfer you may contact Velocity4x at 312.546.6288 or via e-mail at accounts@velocity4x.com or FOREX.com at 908.458.8274 or via e-mail at velocity4x@forex.com.

Through our new relationship with FOREX.com, we look forward to providing you with superior service. FOREX.com is a registered Futures Commission Merchant and a member of the National Futures Association (NFA ID# 0339826). You may also obtain additional information regarding FOREX.com and Gain Capital Group, LLC on NFA's web site.GAIN Capital's corporate headquarter address is 550 Hills Drive, Bedminster, NJ07921 and its main telephone number is 908.731.0750.

Very Truly Yours,
Velocity4x

The following firms have still not publically indicated they have met the requirement. Beware these firms until further notice:

1) SNC Investments: $1,152,000
They are well below the $5 million capital requirement. It is highly unlikely they will make the new requirement at this point. I advise customers to leave this firm and look for greener pastures.

2) Wall Street Derivatives: $1,228,000
This firm is based out of New Zealand and I'm not even sure they have any U.S. customers as their U.S. website is out of service.

3) Advanced Markets: $1,322,000
Amifx is already teetering on the brink as they are the subject of a business conduct committee case before the NFA in which they are cited for a whole host of financial violations including not meeting the old capital requirement. This firm does not have much of a future.

4) AlpariFX $2,481,000
Little known European firm. Well under the cap requirement.

5) Solid Gold Financial: $2,040,000
Solid Gold's future is now in serious doubt. Like many of the other firms on this list they have been charged by the NFA with failing to meet their existing capital requirement. When you can't meet the old requirement it stands to reason you won't be able to meet the new one either. Solid Gold is anything but a solid investment at this point.

6) Bacera Corporation: $2,300,000
Like a turd that won't flush Bacera Corporation just refuses to go down the drain. The Savior wrote Bacera off over the summer as sources knowledgeable about them stated they were going to close up shop. But no, they are still hustling the folks in LA for fresh deposits. In September Bacera settled a complaint with the NFA after it was discovered they were undercapitalized to the tune of $1.2 million. NFA reported Bacera only has about 200 customers as it is. But to those 200, do yourself a favor and get yourself another broker because sooner or later the pipes are gonna get cleaned and these guys are going to get flushed once and for all.

7) ODL Securities: $2,566,000
Ravaged by undercapitalization issues.

8) Forex Club: $3,320,000
They still have not hit the minimum $5 million mark. And don't forget since they are a market maker they have other financial requirements to meet as well. They still haven't publically done so.

9) Easy Forex: $3,789,000
Under siege for their sleazy sales tactics, it's hard to imagine the NFA isn't going to drop the hammer on them soon.

10) Money Garden: $5,035,000
While they have crept up over the $5 million mark MG is notorious for their 400:1 "flexi" accounts which will require MG put up a minimum $10 million in capital in addition to other financial requirements for being a market maker. They are not even close to doing this despite their CEO's insistence they could easily get the money last summer. It looks like this veteran of the industry is about to be forcibly retired.

[forex scholar]

Well the CFTC has officially stepped in to put an end to the shenanigans at One World Capital. I have been reporting on the decline and fall of One World Capital for over six months now so this should be no surprise to anyone following this thread. But it appears that there is a serious shortage of funds at One World which is going to result in heavy losses for customers. This is exactly what I have been warning about for several months now.
CFTC Sues One World Capital Group, LLC and its President John Edward Walsh for Inability to Demonstrate it had Required Capital

CFTC Sues Forex Dealer One World Capital Group, LLC and Its President John Edward Walsh for Inability to Demonstrate it had Required Capital

Winnetka, Illinois Forex Dealer May Owe Millions to Customers
Washington, DC – The U.S. Commodity Futures Trading

Commission (CFTC) announced today that on December 13, 2007 it sued One World Capital Group, LLC (One World) of Winnetka, Illinois, a registered futures commission merchant (FCM), and its President, John Edward Walsh of Lake Forest, Illinois, charging them with inability to demonstrate compliance with capitalization requirements and with failure to maintain required books and records.

On the same day the case was filed, the CFTC won an asset freeze and other emergency relief that will enable the Commission to freeze the assets of One World and safeguard the interests of its customers.

The complaint alleges that One World has been unable to demonstrate that it has maintained at least $1 million in adjusted net capital, the minimum requirement needed for FCMs that are Foreign Currency Dealer members of the National Futures Association (NFA).

According to the CFTC complaint, since at least November 28, 2007, One World and Walsh failed to demonstrate compliance with the net capital amount as required by the Commodity Exchange Act and CFTC regulations. As of December 10, 2007, the complaint charges, One World failed to demonstrate that it had any net assets. While One World appeared to possess $554,000 of funds held in customer accounts, since at least November 2, 2007, the NFA has been receiving complaints from customers alleging that they are unable to get their funds back from One World. The complaint alleges that the amount claimed outstanding by customers exceeds $4 million. The complaint also alleges that Walsh conceded an inability to identify all of One World’s customer liabilities. Furthermore, the complaint charges One World and Walsh with failing to maintain books and records as required by a CFTC regulation.

$4 million owed to customers? This will not be a very Merry Christmas for the customers now trapped at One World Forex.

[forex scholar]

An email is circulating around the net that FXLQ has apparently sent to their customers. The CFTC is about to sue them. FXLQ is in deep, deep, deep trouble:

FXLQ Shut down temporarily by NFA - Page 7

Tuesday, December 18, 2007

To our Valued Clients:
We have temporarily suspended operations due to a Commodity Futures Trading Commission lawsuit filed against the company in Federal Court. Please be assured that as soon as we are able, we will return any messages.
There is a hearing in the U.S. District Court scheduled for January 4, 2008 where we hope to resolve all issues the CFTC has with our company.

Thank you,

Forex Liquidity LLC